Question 1

Inventory is a non-current asset.

Accepted Answer

A) True 
 B)False  False

Question 2

The cost of inventory could include marketing cost.

Accepted Answer

A) True 
 B)False  False

Question 3

The cost of inventory could include the cost of raw materials and labour involved in direct production.

Accepted Answer

A) True 
 B)False  True

Question 4

The cost of inventory could include supervisory labour.

Accepted Answer

A) True 
 B)False

Question 5

Inventory is a liability.

Accepted Answer

A) True 
 B)False

Question 6

A business has cost of sales of £38 000 and sales of £55 000, It had £3 000 in inventory at the start of the year and purchased £43 000 of goods during the year.  All transactions were for cash.  
-what was the cash flow for the year?

Accepted Answer

A)  £17000 
B)  £ 9000 
C)  £12000 
D)  £14000 
E)  None of the above 
A)  £17000 
B)  £ 9000 
C)  £12000 
D)  £14000 
E)  None of the above

Question 7

A business has made a profit of £120, its opening inventory was £30, it purchases were £150 and it closing inventory was £50. All transactions were for cash. What was the total cash inflow for the period?

Accepted Answer

A)  £100 
B)  £120 
C)  £250 
D)  £150 
E)  None of the above 
A)  £100 
B)  £120 
C)  £250 
D)  £150 
E)  None of the above

Question 8

The cost of inventory could include the cost of raw materials.

Accepted Answer

A) True 
 B)False

Question 9

The effect of overstating closing inventory is to decrease profit.

Accepted Answer

A) True 
 B)False

Question 10

The effect of overstating opening inventory is to decrease profit.

Accepted Answer

A) True 
 B)False

Question 11

A business has opening inventory of 200 units which cost £5.00 per unit and during the year it bought an additional 300 units at £6.00 and 400 units at £7.00. It sold 800 units during the same period. 
-the cost of sales using the weighted average cost basis of inventory valuation would be:

Accepted Answer

A)  £4900 
B)  £4977 
C)  £5124 
D)  £5600 
E)  None of the above 
A)  £4900 
B)  £4977 
C)  £5124 
D)  £5600 
E)  None of the above

Question 12

A business made a gross profit of £12000 on sales of £60000, It had £2000 in inventory at the start of the year and purchased £57000 of goods during the year. What was the cost of sales ?

Accepted Answer

A)  £57000 
B)  £55000 
C)  £59000 
D)  £48000 
E)  None of the above 
A)  £57000 
B)  £55000 
C)  £59000 
D)  £48000 
E)  None of the above

Question 13

A business has cost of sales of £38 000 and sales of £55 000, It had £3 000 in inventory at the start of the year and purchased £43 000 of goods during the year.  All transactions were for cash.  
-what was the profit for the year ?

Accepted Answer

A)  £17000 
B)  £15000 
C)  £14000 
D)  £9000 
E)  None of the above 
A)  £17000 
B)  £15000 
C)  £14000 
D)  £9000 
E)  None of the above

Question 14

Cost of sales is equal to:

Accepted Answer

A)  The opening inventory plus the purchases made during the year 
B)  The purchases made during the year 
C)  The opening inventory plus the purchases made less the closing inventory 
D)  The opening inventory plus the purchases paid for less the closing inventory 
E)  None of the above 
A)  The opening inventory plus the purchases made during the year 
B)  The purchases made during the year 
C)  The opening inventory plus the purchases made less the closing inventory 
D)  The opening inventory plus the purchases paid for less the closing inventory 
E)  None of the above

Question 15

A business has opening inventory of 200 units which cost £5.00 per unit and during the year it bought an additional 300 units at £6.00 and 400 units at £7.00. It sold 800 units during the same period. What is the cost of the closing inventory using the first in first out method of valuation?

Accepted Answer

A)  £500 
B)  £600 
C)  £700 
D)  £623 
E)  None of the above 
A)  £500 
B)  £600 
C)  £700 
D)  £623 
E)  None of the above

Question 16

Inventory is a current asset.

Accepted Answer

A) True 
 B)False

Question 17

Inventory is an expense of a period.

Accepted Answer

A) True 
 B)False

Inventory is a non-current asset.

The cost of inventory could include marketing cost.

The cost of inventory could include the cost of raw materials and labour involved in direct production.

The cost of inventory could include supervisory labour.

Inventory is a liability.

A business has cost of sales of £38 000 and sales of £55 000, It had £3 000 in inventory at the start of the year and purchased £43 000 of goods during the year. All transactions were for cash. -what was the cash flow for the year?

A business has made a profit of £120, its opening inventory was £30, it purchases were £150 and it closing inventory was £50. All transactions were for cash. What was the total cash inflow for the period?

The cost of inventory could include the cost of raw materials.

The effect of overstating closing inventory is to decrease profit.

The effect of overstating opening inventory is to decrease profit.

A business has opening inventory of 200 units which cost £5.00 per unit and during the year it bought an additional 300 units at £6.00 and 400 units at £7.00. It sold 800 units during the same period. -the cost of sales using the weighted average cost basis of inventory valuation would be:

A business made a gross profit of £12000 on sales of £60000, It had £2000 in inventory at the start of the year and purchased £57000 of goods during the year. What was the cost of sales ?

A business has cost of sales of £38 000 and sales of £55 000, It had £3 000 in inventory at the start of the year and purchased £43 000 of goods during the year. All transactions were for cash. -what was the profit for the year ?

Cost of sales is equal to:

A business has opening inventory of 200 units which cost £5.00 per unit and during the year it bought an additional 300 units at £6.00 and 400 units at £7.00. It sold 800 units during the same period. What is the cost of the closing inventory using the first in first out method of valuation?

Inventory is a current asset.

Inventory is an expense of a period.

Introduction to Accounting

Wealth and the Measurement of Profit

The Measurement of Wealth

The Income Statement and the Cash Flow Statement

Introduction to the Worksheet

Amounts Receivable and Amounts Payable

Non-Current Assets, Fixed Assets, and Depreciation

Financing and Business Structures

Cash Flow Statements

Final Accounts and Company Accounts

Financial Statement Analysis

Internal Users and Internal Information

Planning and Control

Cost Behaviour and Cost-Volume-Profit Analysis

Accounting for Overheads and Product Costs

Accounting for Decision-Making: When There Are No Resource Constraints

Accounting for Decision-Making: Resource Constraints and Decisions Which Are Mutually Exclusive

Budgets

Investment Decisions

Management of Working Capital

Filters

Exam 6: Inventory

Inventory is a non-current asset.

The cost of inventory could include marketing cost.

The cost of inventory could include the cost of raw materials and labour involved in direct production.

The cost of inventory could include supervisory labour.

Inventory is a liability.

A business has cost of sales of £38 000 and sales of £55 000, It had £3 000 in inventory at the start of the year and purchased £43 000 of goods during the year. All transactions were for cash. -what was the cash flow for the year?

A business has made a profit of £120, its opening inventory was £30, it purchases were £150 and it closing inventory was £50. All transactions were for cash. What was the total cash inflow for the period?

The cost of inventory could include the cost of raw materials.

The effect of overstating closing inventory is to decrease profit.

The effect of overstating opening inventory is to decrease profit.

A business has opening inventory of 200 units which cost £5.00 per unit and during the year it bought an additional 300 units at £6.00 and 400 units at £7.00. It sold 800 units during the same period. -the cost of sales using the weighted average cost basis of inventory valuation would be:

A business made a gross profit of £12000 on sales of £60000, It had £2000 in inventory at the start of the year and purchased £57000 of goods during the year. What was the cost of sales ?

A business has cost of sales of £38 000 and sales of £55 000, It had £3 000 in inventory at the start of the year and purchased £43 000 of goods during the year. All transactions were for cash. -what was the profit for the year ?

Cost of sales is equal to:

A business has opening inventory of 200 units which cost £5.00 per unit and during the year it bought an additional 300 units at £6.00 and 400 units at £7.00. It sold 800 units during the same period. What is the cost of the closing inventory using the first in first out method of valuation?

Inventory is a current asset.

Inventory is an expense of a period.

Introduction to Accounting

Wealth and the Measurement of Profit

The Measurement of Wealth

The Income Statement and the Cash Flow Statement

Introduction to the Worksheet

Amounts Receivable and Amounts Payable

Non-Current Assets, Fixed Assets, and Depreciation

Financing and Business Structures

Cash Flow Statements

Final Accounts and Company Accounts

Financial Statement Analysis

Internal Users and Internal Information

Planning and Control

Cost Behaviour and Cost-Volume-Profit Analysis

Accounting for Overheads and Product Costs

Accounting for Decision-Making: When There Are No Resource Constraints

Accounting for Decision-Making: Resource Constraints and Decisions Which Are Mutually Exclusive

Budgets

Investment Decisions

Management of Working Capital

Filters